April 1 (Bloomberg) -- Top executives from 18 large U.S.
companies, including FedEx Corp., CVS Caremark Corp. and Boeing
Co., are trying to keep up pressure on Congress to cut corporate
tax rates.

The executives are sending a letter to congressional
leaders today, urging action on the one-year anniversary of
Japan’s rate cut, which left the U.S. and its 35 percent
statutory corporate tax rate as the highest in the
industrialized world.

“We stand ready to support your efforts to make the U.S.
more competitive,” wrote the group. “We know that some choices
may be difficult and understand that base-broadeners, such as
eliminating tax expenditures, may be necessary to achieve the
significant reduction in the statutory rate that is required for
the U.S. to better compete globally.”

Offering up tax breaks for elimination is easier for
companies that don’t benefit from many of them and don’t have
subsidiaries in low-tax foreign jurisdictions. CVS, for example,
reports no foreign income.

The lack of agreement on how to offset the cost of a
corporate rate cut -- along with political differences over
broader fiscal questions -- have prevented lawmakers from
turning a general agreement on revenue-neutral corporate tax
rate reduction into specific law.

25% Rate

Representative Dave Camp, a Michigan Republican who is
chairman of the House Ways and Means Committee, plans to move a
comprehensive rewrite of the individual and corporate tax codes
through his panel this year. He hasn’t said how he would pay for
reducing the rate to as low as 25 percent.

President Barack Obama last year called for dropping the
rate to 28 percent and to 25 percent for manufacturers. He would
eliminate breaks for oil companies, the insurance industry and
private equity managers as part of the way to pay for the rate
cut. The administration has also suggested options such as
lengthening depreciation cycles and limiting the deductibility
of interest.

Many U.S. companies, particularly in the high-technology
and pharmaceutical industries, don’t pay anywhere near the 35
percent rate, making them more interested in preserving breaks
than cutting rates.

Signers of the letter included Jim McNerney, chief
executive officer of Boeing, Larry Merlo, president and CEO at
CVS and Frederick Smith, chairman and CEO of FedEx. Other
signers were Thomas Falk, chairman and CEO of Kimberly-Clark
Corp. and Robert Iger, chairman and CEO of The Walt Disney Co.

They are members of the RATE Coalition, a collection of
companies that place a priority on rate reduction.